Economic preferences across generations and family clusters: A large-scale experiment
Shyamal Chowdhury, Matthias Sutter & Klaus F. Zimmermann
#2020-030
Economic preferences are important for lifetime outcomes such as
educational achievements, health status, or labour market success. We
present a holistic view of how economic preferences are related within
families. In an experiment with 544 families (and 1,999 individuals)
from rural Bangladesh we find a large degree of intergenerational
persistence of economic preferences. Both mothers’ and fathers’ risk,
time and social preferences are significantly (and largely to the same
degree) positively correlated with their children’s economic
preferences, even when controlling for personality traits and
socio-economic background data. We discuss possible transmission
channels for these relationships within families and find indications
that there is more than pure genetics at work. Moving beyond an
individual level analysis, we are the first to classify a whole family
into one of two clusters, with either relatively patient, risk-tolerant
and pro-social members or relatively impatient, risk averse and spiteful
members. Socio-economic background variables correlate with the cluster
to which a family belongs to.
JEL-classification: C90, D1, D90, D81, D64, J13, J24, J62
Keywords: Economic preferences within families, intergenerational
transmission of preferences, time preferences, risk preferences, social
preferences, family clusters, socio-economic status, Bangladesh,
experiment